Starting out; Disgruntled

Rochester, NY · Member since 2017 · 7 posts · 13 votes

Hey all.
I recently heard of someone who has acquired a lot of property recently. Some main st village type property, mixed use with store fronts etc. I heard through the grape fine that he had recently started “scooping up” properties here and there and shes going to be starting in this next area soon.
As a young man and young investor, I’m having trouble with a few things.

1)finding a property with a decent return.
2) finding a primary residence that doesn’t cost and arm and leg (rent or own).

I feel a lot of young investors are possibly in my position. For starters, they are having trouble even keeping there cost of living low while starting new families. Secondly, trying to achieve wealth through over priced real estate markets seems impossible.

If I can do one thing, one daily lever to pull, how can I be the guy I described in the beginning?

I love real estate so much but I can’t even get in, and my dream is to be the guy improving property for the good of the world. Any thoughts?

Thanks to anyone that responds.

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Danielle Jackson

Phoenix, AZ · Member since 2021 · 504 posts · 282 votes

First thing to NOT do, is compare your journey with anyone else. Everyone has different circumstances and goals. Secondly, keep hunting (don't let off the gas in running numbers on properties you like) and eventually you will come across some that financially make sense.

Consider expanding your markets you are looking in so you have exposure to more properties, and if you haven't already, engage with a RE agent who specializes in investment properties so you may have some insight to properties before they hit the market.

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Rick Albert
Real Estate Agent · Los Angeles, CA · Member since 2018 · 2k+ posts · 1k+ votes
4y
It's all about pivoting. When I've had clients struggling to find properties, we create a new game plan an execute.
For example, dysfunctional floorplans take out most of the buyers, even though some can be fixed. Maybe it is just moving a wall or converting a space into another bedroom. Not everyone has that vision.
Many struggled in their own time. One of my mentors has been investing since the 70s. His first place he bought it with a friend and they rented out the 3rd bedroom. He now owns multiple properties and develops here in Los Angeles.
We all start from somewhere.
1 Reply
Brenna Carles
Lender · Sevierville, TN · Member since 2021 · 21 posts · 17 votes
4y
Hey Brendan! From a DTI perspective there is a DSCR product that can work for you so that you can scale quickly. It does not go off of personal debt or personal income and you can do 15-20% down depending on what you want your cash on cash return to be. There is also a second home loan that you can do 10% down on but this does go off of your personal income and debt, and you would need to intend to vacation there as well. Totally possible for the debt problem to do the 15% down DSCR. For the funds: If you already own any real estate, look into getting a HELOC as opposed to refinancing. HELOCs go off of your equity in the property you own, and can be used multiple times as opposed to a refinance which is one and done. For the second home loan you can get a gift from a relative if you have at least 5% down of your own funds. For the DSCR loan you can also get a gift from a relative if you have at least 5% down of your own funds and with good credit you will not need to show reserves! There is always a way. It may be difficult or confusing at first, but if you research these options, you will find something that will fit in your long term goal category! Hope this helps!
2 Reply
A.J. D'Asaro
Investor · Chicago, IL · Member since 2016 · 49 posts · 46 votes
4y
@Brendan M Brown

Upstate NY is not an overpriced market compared to most parts of the country. You need to remove "I can't" from your vocabulary. Ask yourself: "How can I?" Your mind will start delivering you the answers. Like others have said, IT'S GOING TO BE HARD. You want to be a boss real estate investor. Start with the first deal. Get to work. One day you will wake up and look around and realize you've achieved it. And the last five years has gone by so fast. But now you have 5 rental properties and are looking at big commercial deals, and you are the guy in your story.
Some things to start you thinking:
1) Can you afford to leave a "class A" neighborhood and look for an up-and-coming neighborhood?
2) Can you buy a multi-unit that you could live-in rent free while the other tenants pay the mortgage (house-hacking)?
3) Do you know anyone with money that would invest with you in a multi-unit (family member or investor / friend)?
4) Is running an Airbnb an option for you?
1 Reply
ThomasRoy Penland
Rental Property Investor · Albuquerque, NM · Member since 2020 · 53 posts · 32 votes
4y
@Brendan M Brown
Don’t give up. First, find a nice property you would like to live in. One that fits you. It doesn’t need to fit the family that is not there yet. Purchase it as your own. It looks like you are military. This gives tremendous advantages. Use your off base stipends to pay for your mortgage. When you get sent to a new duty station, rent out your current home, and purchase a new one that fits whatever size family you have at that time. It could be just you, you and a significant other, or you and them and kids. Just get what works for you at the time. Again, use your military stipends you pay your mortgage. Rinse and repeat. After being in 3 or 4 duty stations, you will already have 4 homes that are paying for themselves.
Positive cash flow would be ideal, but even if you get within a few dollars per month, it will pay off ten fold. Taxes for immediate payback, and then in a year or two when the rent increases, you will be in the money.
So, 8 years, 4 duty stations, 3 rental properties providing income. Now start looking at paying one off, or fixing and flipping your own inventory. TIME is the key!
Good luck! TR
1 Reply
Tanner Sherman
Real Estate Broker · Omaha, NE · Member since 2020 · 329 posts · 203 votes
4y
I completely agree with what Danielle said above; Do NOT compare yourself to anyone else. Get really good at something in real estate. Whether it is deal finding, analyzing or maybe creative finance. Then find someone else that is better at the things you are not good at.
Brandon preaches this all the time. The three things needed to make a real estate deal happen are Money, Hustle (time) and Knowledge. If you have a lot of time and motivation, find someone who has money and knowledge that you can partner with or work under. If you have hustle and knowledge, it becomes very easy to find the money. There are plenty of investors out there that have money but don't have the knowledge or time. There are plenty of ways to divide up percentages of each of these three things. Maybe what makes the most sense for you is to find someone that has the money and wants to help you purchase a househack where you become 50/50 partners. Get creative, not discouraged.
0 Reply
Michael Lynch
Professional · Millbrae, CA · Member since 2016 · 26 posts · 16 votes
4y
@Joe Villeneuve A Google search of 1073751824 yields only a few Bigger Pockets postings by you.
2 Reply
Philip M.
Rental Property Investor · Garland · Member since 2018 · 38 posts · 22 votes
4y
Hello Joshua,
Sounds like you are looking at a primary residence and also looking at rental property. From my personal experience start with focus on the primary residence. There is be so much power in 'buying right' for your primary residence. You have the best lending options with the lowest down payment. If you can swing it to get a dup, tri or fourplex that would be even better. My first property was a distressed single family with 3% down. It was cheaper than rent so I saw it as a win. I used 401k money for down payment and closing. On your first home you can withdraw without penalty. Out of pocket was about $200. After renovating I got a $30k home equity loan that I used to get my first rental. This took time and focus on my goal. Every journey of a thousand miles starts with one step. Fast forward a few years and now I have 10 rentals that all came from brrrr'ing of the original home equity loan that came from $200.
You can do this.
1 Reply
Rumen Mladenov
Investor · Newark, DE · Member since 2014 · 245 posts · 198 votes
4y
@Michael Lynch Joe is trying to stress the power of compounding. If you have a dollar and double it every year for 30 years, you will end up with 1,073,751,824 dollars.
0 Reply
Joe VilleneuvePro Member
Plymouth, MI · Member since 2013 · 13k+ posts · 19k+ votes
4y
Originally posted by @Michael Lynch:
@Joe Villeneuve A Google search of 1073751824 yields only a few Bigger Pockets postings by you.

OK. Then if you read them, can you tell me what that sequence means and why it's important enough for me to say that every decision the REI makes should be based on that number sequence?
0 Reply
Joshua McMillion
Rental Property Investor · Madison, AL · Member since 2019 · 487 posts · 658 votes
4y
@Brendan M Brown
Your heart is in the right place, and I would try to look at creative financing direct to sellers. Not the bandit signs or letters that say you pay for homes in cash, but a more thoughtful approach centered around seller financing. Seller financing will allow you to get into a property with little to no money down, and you get to negotiate the terms.
I understand your pain, and several years ago, I was in your shoes. If it weren't for the military and the VA Loan program, I would not have been able to purchase a home. Keep pushing; real estate investing is hard, and do not compare yourself to others. Set down and come up with SMART long-term goals and take daily action to achieve them.
Sincerely,
Josh
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Tyler Rickey
Investor · Indianapolis · Member since 2017 · 5 posts · 0 votes
4y
Maybe move to a more affordable state/ city with a lower point of entry. I moved from California to Indiana 3 years ago because I was no longer finding value in California, one of the best decisions I've ever made. Not sure what your situation is as far as a job or marriage or anything else that may be holding you back, but if you really want that dream you need to go all in, burn your ships, develop an abundance mentality and make it happen. Maybe you could volunteer your time, work for free for somebody who is already doing it, that will get your foot in the door and you can rapidly build knowledge and learn from that persons mistakes and not repeat them. This journey is not easy and no matter what you're gonna make big sacrifices.
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Bud Gaffney
Rental Property Investor · Boston, MA · Member since 2019 · 2k+ posts · 1k+ votes
4y
@Brendan M Brown patience my friend. Stop comparing and think happy.
Do not compare yourself to others.
1 Reply
Dan Maciejewski
Realtor · PInellas County Largo, FL · Member since 2016 · 902 posts · 810 votes
4y
There's a few things you should do daily. But the number one thing to do is to be a high earner in your chosen field. Hone your skills and be great at what you do for a living. Even if you want to F.I.R.E, you have to have something to retire from. You can't invest what you don't have.
To hone your real estate skills, look at everything that you find interesting. Run numbers until you don't need to run them anymore. It's easier after you have real-world experience, of course, but you can estimate until you know the real costs.
Almost everything will look like a crappy deal -- don't waste your time trying to understand why people are buying those, just move on and run numbers on the next thing. Run numbers on single family rentals, multifamily rentals, flips, storage units, hotels, gas stations -- everything you may find interesting. Then you will start to have an idea of what your local market looks like in each sector , what ROI your local investors are accepting, and what you think is and isn't a good deal.
As you focus on number 1 and start to actually acquire capital, you will also be growing an idea of what you want to spend it on. Then you will have the knowledge and ability to act when you see a great deal.
And as far as being a young investor trying to cut cost of housing, I always recommend looking at a small multifamily where you can drastically cut down your cost of living. That way you can save your biggest expense -- housing -- and put that saving into an investment fund. This is the fastest way to jumpstart an investment fund. Cutting out Starbucks can save 1,300/year -- cutting out rent/mortgage payments can save 15,000-36,000/year.
1 Reply
Justin Vogelgesang
Investor · Fort Worth, TX · Member since 2021 · 68 posts · 57 votes
4y
Hey Brendan, I think the first thing worth mentioning is to do your best not to be disgruntled with anyone else's success. They more than likely started out in a similar position as you, and worked their way to that point. If anything, reach out to that individual and mention you're starting out and ask for advice/tips to succeed. It may be a long shot, that person may be a jerk and waste of a call. Being humble and reaching out for help to better yourself never goes out of style though.
As for your points of concern, I understand that it can be troubling finding those ideal properties. That's part of this business though. I see it mentioned already that if it was easy, everyone would do it. One thing I can assure you is that there is always a deal to be found somewhere though. Maybe you can adjust your aim a bit, and search in a nearby area. Hope this helps in some way, I've been in a rather similar situation before
1 Reply
Marcus Auerbach
Investor · Milwaukee - Mequon, WI · Member since 2010 · 5k+ posts · 7k+ votes
4y
Success always looks easy from the outside. We all started very humble. I bought my first property 14 years ago and it felt like it took all I had at the time: all my guts, knowledge, money, time - just to buy ONE property and get it rented. The second one was much easier, even though I did not even have plans for it.
REI is a life's journey.
It takes a decade to build something. It starts small and slow, but after year 5 or 7 things start to multiply.
2 Reply
Joe SplitrockPro Member
Moderator
Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes
4y
@Brendan M Brown

I am not here to judge you, but if you are disgruntled, the only person to blame is yourself. Until you accept that reality, nothing will change. People look to external people and factors to make excuses for their own short comings.

I will offer constructive advice.
First thing you need to do is get a side hustle, maybe two, so you can start earning extra money. There are tons of options. Driving for ride share or grocery delivery is something you could start in a few days. You can mow yards, shovel snow, haul junk, clean houses or any number of low skill jobs. Put consistent ads on Facebook and you will have customers within a couple weeks. Another idea is sign up with contract work sites like Indeed or Upwork. There are hundreds of jobs that people hire out, so just find something that matches your skillset. The point is you need to pickup extra income.
The other thing you need to do is start deal hunting by networking directly with sellers. If you can find an off market deal, there is less competition and therefore it is easier to get a good deal. You can do this by making phone calls, driving for dollars door knocking or just networking with coworkers and your social media friends.
Bottom line, until you accept responsibility for your situation and take action to change it, nothing will get better. Complaining and being disgruntled will just convince you it isn't worth even trying. This is how people get stuck in low paying jobs and never get ahead in life.
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Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
4y
Originally posted by @Matthew Paul:
@Brendan M Brown You arent gonna get it all at once . Investment property with good return , a primary residence not costing an arm and a leg ,start a family etc .
Pick 1 , work hard at getting there , then hit on number 2 and move up the ladder .
Your first house is your first investment , if done right it becomes your first rental . You live in it , grab a few roomates , bank some cash , when a deal happens , buy your second property .
I worked 12 hours a day for years to make bank , didnt start a family till I was in my late 30's . havent bought a new car in my life . Lived cheap for years , ( still do ) .
My first house was expensive , rates were high , it was $51K in 1984 . Its now $300 K . I could barely afford it . Lived there 10 years , saved money , looked for years for a deal , one fell in my lap , I jumped on it , lived there for 10 years , its now worth 4 times what I paid . Leveraged those 2 and then bought 4 more .
It takes time , sacrifice , and hard work .
Easy ? Not

my first home to live in was my first investment and the best thing I ever did set me up for the rest of my career.. I was fortunate that it was the SF Bay Area and the mega appreciation we all got.. but for today and in many markets the house hack a 2 to 4 unit with FHA loans is the way to go to start. and if you cant muster up the ability to save 10 to 15k and have good credit then you frankly dont deserve to own real estate and should just be a renter.. it takes some sacrifice to start.. I was 19 when i bought my first home and had save 10k from 16 on.. But credit was perfect as I knew the importance of good credit.
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Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
4y
Originally posted by @Bruce Woodruff:
Originally posted by @Russell Brazil:
Readjust your expectations. They are not abnormal....but it is the same feelings that every person at all points in history has thought...they think real estate is too expensive and too hard to acquire. When I bought my first property, prices were literally half what they are today, and I thought the same things you are thinking today, that it is so expensive. Real estate is always expensive.

This is a really good point. Perhaps you need to readjust your expectations and become more realistic. I would bet that most older successful investors here took a big risk on their first investments and probably couldn't afford to even do it.
For example, my first purchase was $88k, interest then was 15%. I was paying $200 mo in rent and the new loan payment was $900+. I could NOT afford to do this, but did it anyway. It was a huge struggle and the house was almost lost a few times. I waited for appreciation to kick in, sold it for a huge profit and moved up ( I thought). I lost the next house and all the equity in it.
So there is no easy way, this is not a safe game, it is very very risky. Might not even be the game for you.....?

Similar my first home was In Milpitas a new Shapel home for 79k.. in those days you did 10% down and a HML for 10% ( cant do that today LOL) but for 9k I got into that home.. I dont still own it but if I did its value is north of 750k.. and I was before the interest rates went sky high my rate was 9%.. but lived there 1.5 years and sold for 150k ( sf bay area) and kept rolling up Bay Area homes to live in ending up in Palo Alto and the Napa vally and those homes each made me north of the 500k no tax exclusion. set up my life really.

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Kyle Ransom
Investor · Atlanta, GA · Member since 2016 · 241 posts · 86 votes
4y
It is a numbers game. The good news is that you are working in a market that is not as saturated as Fix and Flip houses. You will find a deal eventually.
1 Reply
Doug Spence
Investor · San Diego, CA · Member since 2016 · 1k+ posts · 975 votes
4y
@Brendan M Brown If I could only recommend ONE thing for you to do, it would be to join a real estate mastermind group.
Surrounding yourself with like-minded individuals who are likely only a few steps ahead of you in the game will be invaluable for both you mindset (staying motivated, others holding you accountable for your goals) and tactical/strategic advice ( where to invest, how get creative with finding properties, financing them, etc).
There are lots of other things I would recommend, but if I could only recommend one, its join a mastermind.
Good luck and keep us updated on your journey! You can 100% do it.
1 Reply
Chad McMahan
Residential Real Estate Broker · Sedona, AZ · Member since 2017 · 751 posts · 504 votes
4y
Originally posted by @Brendan M Brown:
Hey all.
I recently heard of someone who has acquired a lot of property recently. Some main st village type property, mixed use with store fronts etc. I heard through the grape fine that he had recently started “scooping up” properties here and there and shes going to be starting in this next area soon.
As a young man and young investor, I’m having trouble with a few things.

1)finding a property with a decent return.
2) finding a primary residence that doesn’t cost and arm and leg (rent or own).

I feel a lot of young investors are possibly in my position. For starters, they are having trouble even keeping there cost of living low while starting new families. Secondly, trying to achieve wealth through over priced real estate markets seems impossible.

If I can do one thing, one daily lever to pull, how can I be the guy I described in the beginning?

I love real estate so much but I can’t even get in, and my dream is to be the guy improving property for the good of the world. Any thoughts?

Thanks to anyone that responds.

Brendan,
Many of my long time clients lean on me to bring the best return opportunities to them. I recommend you choose 1-3 hot return and appreciation markets and be loyal to 1 excellent/seasoned investment realtor in each market and lean on them to guide you and steer you to opportunities. Best advice- if you do this, be genuinely ready to pounce on the best opportunities. This will drastically reduce the time and energy you need to invest. Let the local experts do it.

2 Reply
Linda S.
Investor · Richmond, VA · Member since 2016 · 1k+ posts · 2k+ votes
4y
@Brendan M Brown,
If you're disgruntled now that you aren't finding a deal, wait until a tenant takes a giant dump on your rental, trashing it causing thousands and thousands of dollars in damages! You have to be your own cheerleader, and you have to be the one pushing yourself to keep going-- no one else cares about what or why you are doing it .
You need thick skin, lol this is just the beginning! It gets a lot worse! I always say you can tell someone's experience level, based on how salty they seem... just some food for thought! Good luck!
3 Reply
Bonnie LowPro Member
Lender · Asheville, NC · Member since 2016 · 1k+ posts · 1k+ votes
4y
To be an investor you have to cultivate a spirit of resiliency. There are SO many ups and downs. Constantly changing market conditions, changes to financing options, deals that look exciting and then fall through, partnerships that show promise then fizzle. You have to have the fortitude to ride those ups and downs. If you don't have that, the place to start might be with mindset. There are lots of great books, podcasts and other resources for cultivating that sense of resilience, purpose and willingness to embrace the challenges. There are also so many stories of people who have come from intensely difficult circumstances and have managed to find a way (incarceration, homelessness, addiction, abusive relationships, extreme poverty, you name it). Their stories are inspiring and informative and the one thing they all have in common is resiliency. If you want it bad enough you will make it happen in any market. You have to get creative, you have to stay focused and most of all you have to believe in yourself. Ask yourself what you're willing to do. What are you willing to sacrifice? Are you willing to rent an apartment that you can Airb&b arbitrage? Are you willing to rent a house and sub-lease rooms to help pay your living expenses so you can shovel extra cash into your capital budget? If you own a home are you willing to sleep in the basement or on the couch and rent out the rooms to others? I recall one guy who I think was on the BP Rookie podcast who used his W2 income to qualify for a home in a fairly expensive market (Bozeman, MT) and never even used his own home. He rented out the entire house by the room and slept in his camper van in the side yard even in the middle of winter. Hopefully you don't have to commit to any extreme sacrifices to make your dream come true, but you do have to ask yourself what you ARE willing to do. Once you know that, you'll find a way even if it's not a straight or obvious path. Good luck to you and don't give up. There's a very good chance you'll regret that decision.
[email protected]
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Bruce WoodruffPro Member
Contractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
4y
Well said, @Linda S. !!
1 Reply
Gary Faraon
Rental Property Investor · Kingsland, GA · Member since 2016 · 32 posts · 7 votes
4y
@Brendan M Brown
Get rid of the dog. Get rid of the girlfriend/boyfriend. Sell all your belongings. Live in your car. Save all that money for an opportunity. You will see opportunities after reading some of, if not all the forums on they path u want to take. BP podcast on youtube-Free! Stop watching stupid cat videos. Live and breath realestate. Easy day!
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